Share This Story!

2nd accountant to plead guilty in Madoff scam

The accountant for many of Bernard Madoff's wealthiest clients is expected to plead guilty next week to an indictment that accused him of helping carry out the disgraced financier's massive Ponzi scheme.

The accountant for many of Bernard Madoff's wealthiest clients is expected to plead guilty next week to an indictment that accused him of helping carry out the disgraced financier's massive Ponzi scheme.

A Tuesday pre-trial hearing for Paul Konigsberg was adjourned for one week because prosecutors and defense lawyers are in "plea discussions," a new filing in Manhattan federal court showed Tuesday.

The Manhattan U.S. Attorney's office said Konigsberg is expected to enter a guilty plea on June 24 before U.S. District Court Judge Laura Taylor Swain.

Defense attorney Reed Brodsky, who is listed in the filing as having participated in Tuesday's hearing, did not immediately respond to a message seeking comment.

Konigsberg was indicted last year on charges that he falsified account statements and trading records for Madoff clients, preventing them from discovering they'd been victimized by a long-running scam in which Madoff stole billions from average investors, charities, celebrities and others.

The Securities and Exchange Commission filed a parallel civil case against him.

At the time of his Sept. 26 arrest, Brodsky said Konigsberg was "an innocent victim of Bernie Madoff," and argued the scam mastermind "deceived everyone around him."

But in March, five former Madoff employees who mounted a similar defense at a long-running trial were convicted on charges they joined their boss in participating in and personally profiting from the scam. They are scheduled to be sentenced in July.

Madoff's scam collapsed in Dec. 2008. He pleaded guilty the following year without standing trial and is now serving a 150-year prison term.

Madoff's personal accountant David Friehling pleaded guilty in 2009 and testified as a prosecution witness at the trial of the five former Madoff employees.

Konigsberg, the senior tax partner at Konigsberg Wolf, handled accounts for more than 300 of Madoff's clients, according to the five-count criminal indictment against him. He also was the only person outside the Madoff family to hold an ownership interest in Madoff's investment business, the indictment charged.

"In order to keep his scheme hidden for so long, Madoff needed the assistance of certain willing outsiders that could be trusted to handle otherwise suspicious activity," the indictment alleged. "Madoff directed many of his clients — including some of his most important customers, in whose accounts Madoff executed the most glaringly fraudulent transactions" to Konigsberg.